Breaking down the league's proposal
October, 16, 2012
By Pierre LeBrun | ESPN.com
TORONTO -- So what’s next?
The NHL Players’ Association will be in communication via phone with the NHL on Wednesday to seek clarification/question on a number of fronts from the NHL’s surprise offer on Tuesday.
They will then meet on Thursday in Toronto.
The NHLPA’s reaction and eventual counter-proposal will be crucial to whether or not there’s going to be a resolution. My sense is that the league is willing to tweak some things, yes, but if the NHLPA comes back hard with an ultra-aggressive counter-proposal, some owners may want the league to walk away and enter a deep freeze.
I believe there’s going to be a deal, but how the NHLPA responds to the league’s offer is the biggest single moment in this entire negotiation.
Meanwhile, to further our news story on the site, here are more details from the NHL’s offer, which is six years in length with an option year for a seventh:
- There were several contradicting reports out there Tuesday regarding the entry-level system, but multiple sources confirmed the new proposal would see ELS go from three years to two years in length. The one caveat is that if you’re a player for example that’s coming from college and joining your NHL team late in the season -- think Chris Kreider of the Rangers -- that doesn’t count against your two-year, entry-level commitment. You would still have to play two full seasons under an entry-level deal. What the offer Tuesday laid out is two full seasons of entry level.
- You may wonder why the heck the league would want to shorten the entry-level deal. Combined with the fact that the league also asked for a five-year limit on term for contracts and UFA eligibility to go to eight years or 28 years old, what the league is trying to do here is change the dynamics of the second contract -- limit the financial flexibility of the second contract -- and change the system so that players now make their big money in the third contract.
- Where as a 50-50 split of revenues would see the 2012-13 salary cap lowered to $59.9 million, the league’s offer calls for all 30 teams to be able to spend up to $70.2 million (this past summer’s cap) for the first year of the deal; essentially giving all 30 teams a 12-month transition period. By Year 2 they must comply with the cap. This is significant given the number of teams that would have been over the cap with not very much time to get under it before the puck drops.
- There are tighter restrictions on the year-to-year salary in player contracts. The salaries can only increase or decrease by no more than 5 percent. Again, this is an attempt to mitigate the "cheat deals" and front-loading that happened in the past CBA. The league’s initial offer in July called for flat salaries across all contracts, so this is a bit of a change, although not much.
- The NHL offer proposes to make the salaries of minor-league players on NHL contracts (above a threshold of $105,000) count against the salary cap. This is to prevent teams from stashing players in the minors (think Wade Redden).
- Embracing an idea first proposed by Maple Leafs GM Brian Burke years ago, the league’s offer included the ability to retain salary in trades. Under the expired CBA, teams could not trade or keep parts of a player’s salary in a trade. This new provision would obviously facilitate trades in a cap market that saw deals minimized, especially in the first half of the season.
- All existing NHL contracts which go longer than five years will be subject to new cap calculations, specifically those deals will count against a team's cap regardless of whether the player is still playing or not. My belief here is that this is the NHL's attempt at correcting the so-called "cheat deals" or back-diving deals -- like those of Marian Hossa or Roberto Luongo -- which carry bogus salaries at the end of deals to lower the cap hit.
- There were conflicting reports about the dynamics or definition of hockey-related revenue in this offer. To be clear: a league source says the NHL does NOT try to change the definition of HRR in this offer like it attempted to in the summer. These are the same old definitions of HRR used in this new offer. Having said that, my guess is that giving the back and forth on HRR language all summer long, the NHLPA will seek further clarification on this Wednesday in its phone call with the league.
- It is a six-year deal with a "mutual option" for a seventh year.
- As part of NHL’s new revenue sharing plan which calls for $200 million, at least 50 percent of the pool will be raised from the top 10 revenue grossing clubs; the distribution of the revenue sharing will be determined every year by a revenue sharing committee (which the NHLPA will be part of).
- In the end, the most important part of this offer and the one that players will have the most focus on is the league’s complicated mechanism in which it says players’ salaries will be kept whole in first few years via deferred payments, etc. My guess is that the NHLPA will try to poke holes in this and would prefer to keep it more simple and have a higher percentage of HRR in the opening few years -- some transition down to 50-50 instead of going to 50-50 right form the start.
We shall see.
Either way, the pressure is on the NHLPA now. I believe Gary Bettman moved more in this offer than he really would have wanted to, owners urging the league to move in an attempt to save a whole season.